US stocks rise after Janet Yellen tapped to lead US Federal Reserve

US President Barack Obama's nomination of the next Federal Reserve chair offered Wall Street a distraction from the political deadlock in Washington this morning.

Mr Obama has tapped the Fed's current vice chairman Janet Yellen to replace Ben Bernanke when his eight-year term ends in January.

Dr Yellen was the anticipated choice after Larry Summers pulled out of the race last month.

Investors were becalmed by the move; if confirmed, she is expected to continue the central banks' massive stimulus measures.

The minutes from the Fed's September meeting show the bank's decision to continue its $US85 billion bond-buying program last month was a close call.

The move shocked investors at the time, but the tone of the minutes suggest the bank was in no hurry to remove stimulus, with a steady policy stance, said TD Securities director of US rate strategy Millan Mulraine.

"Overall, these minutes were quite dovish, especially when benchmarked against the June edition which was when the last set of economic projections were provided," Mr Mulraine said in a research note.

At the close of trade, the Dow Jones Industrial Average was 0.2 per cent or 26 points higher at 14,803, the broader S&P 500 index added 2 points or 0.1 per cent to 1,658 and technology stocks took another hit, with the Nasdaq Composite Index losing 0.5 per cent to .

Across the Atlantic stocks finished lower; the FTSE 100 index in London shed 0.4 per cent to 6,338 and the DAX in Germany lost 0.5 per cent to 8,517.

The Australian market was set for a weaker open reflecting those losses overseas; at 8:30am (AEDT), the SPI futures contract was pointing to a loss of 0.4 per cent at the start of trade.

The Australian dollar was boosted by Dr Yellen's nomination to lead the Fed, as US stimulus measures keep the US currency down, supporting the Australian dollar.

It was buying 94.5 US cents, 69.9 euro cents, 92 Japanese yen, 59.2 British pence and less than $US1.14 in New Zealand.

On commodity markets, the spot price of gold slipped to $US1305.80 an ounce and West Texas Crude oil closed sharply lower at $US101.62 a barrel